Does it route my traffic through some microsoft, or other 3rd party server, such that microsoft (or the 3rd party) gets to log every thing I do online?
From my understanding, "Teredo" interface is related to "IPv6" and most programs ( as of today ) don't use it. A known program which uses "Teredo" is "utorrent" for bandwidth gain.
Technical details about "Teredo" is covered in this Technet article : http://technet.microsoft.com/en-us/network/cc917486.aspx
Teredo is a NAT traversal technology for IPv6 traffic. IPv6 traffic tunneled using Teredo can cross one or multiple NATs and allow a Teredo client to access the hosts on the IPv6 Internet (through a Teredo relay) and other Teredo clients on the IPv4 Internet.
Honestly speaking, i am not knowledgeable enough to understand the underlying working of "TCP/IP" protocol.
From the security point of view, nobody knows whether a Windows machine contain a backdoor which allows Microsoft to access your PC ( we don't know the source code ).
Edited by Anshad Edavana, 14 May 2014 - 02:51 AM.